Libya’s SWF to invest billions in local stock market

The Libyan Investment Authority (LIA), the North African sovereign wealth fund (SWF) with about US$66 billion in assets, plans to pour billions of dollars into the country’s stock market, its chairman said.

Speaking to Tripoli-based Libya Herald, Abdulmagid Breish said the investments by its Libyan Local Investment and Development Fund (LLIDF), alongside the central bank, would help to fund infrastructure projects in the country following more than three years of ‘Arab Spring’ upheaval.

"The LIA wants to pass 20% to 30% of its future LLIDF investments through Libya's nascent stock exchange," said Mr. Breish, adding that the investments would help fund a multi-billion dollar plan for a medical complex.

He added that the LIA was also seeking to set up a rainy-day fund that would save surplus oil revenues to make up any future budget deficits.

"This would be a short-term investment fund as it is designed to remain liquid. If the government faces a deficit in any given budgetary fiscal year it can borrow from this fund for the fiscal year in question," Mr. Breish explained. In an interview with Reuters last month, the head of the Libyan parliament's budget committee said that the country’s budget deficit could reach $8 billion in 2014.

In April, the LIA said it planned to hire external firms to manage about $11 billion of its assets.

In a separate interview with Bloomberg, Mr. Breish said that the LIA would split its assets into three separate funds as early as next year as it seeks to once again invest overseas.

The fund, which was established in 2006, has suffered from years of mismanagement both during and in the aftermath of the reign of former ruler Muammar Gaddafi.

The LIA is Africa’s second largest sovereign wealth fund by assets following Algeria’s Revenue Regulation Fund. It was established to invest Libya’s oil surpluses, and owns stakes in Italy’s Unicredit and defence firm Finmeccanica.